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Chancery Court Decides Participation Issues in Class Action Settlement

By Francis G. X. Pileggi, Esq.

CBOT Group, Inc. v. Chicago Board Options Exchange, Inc., No. 2369-VCN (Del. Ch., July 29, 2009), read letter decision here.

Summaries of the several prior decisions by the Chancery Court in this case are available here, here and here.

This letter decision is one in a series of resolutions by the Chancery Court, after a class action settlement was approved, of claimants who "appealed" to the court from the denial by class counsel of their requests to participate in the funds available from the class action settlement in this case. Other similar decisions by the court are linked above. The issue in this decision (and the others) relates to the consequences of the alleged (and in some instances admitted) failure to comply with the procedures and prerequisites established by the court for participation in, or receipts of funds from, the class action settlement. In its prior decisions involving similar claimants, the court has been quite lenient regarding use of the "wrong form", or understandably late submissions of forms to class counsel, or other lack of strict compliance with the process for seeking funds from the settlement.

 In sum, in this decision, the court allowed one claimant who qualified to participate in the "Group B Class Settlement" but instead filed a form to participate in the "Class A Group Settlement", to be permitted to participate in the Group B Class Settlement. However, the other claimants addressed in this decision did not fare so well. The other claimants in this ruling were found not to have satisfied the equitable factors or meritorious reasons that would justify, in the court's view, the lack of compliance with various conditions for participation in the settlement.

Full post as published by Delaware Corporate and Commercial Litigation Blog on July 29, 2009 (boomark / email).